Saft, a global company
A firm whose products can be found everywhere from Alaska to deep space, Saft operates in 18 countries. The history of its globalization is a story of both opportunity and strategy.
From the beginning, Saft developed as a result of export. In the 1920s, by filling an order for Spanish rail company Madrid-Zaragoza-Alicante, Saft drew the attention of the Stone Company of London, then the world's largest supplier of rail equipment. It signed an agreement with Stone to become the firm’s exclusive supplier of alkaline batteries worldwide, with the exception of France.
Thus, Saft quickly gained access to a global sales network. According to founder Victor Herold, Saft delivered 30 percent of its total production to Stone every year, up until 1939. Its batteries were used in Spain as well as in South Africa, India and other countries that formed part of the British Empire at the time.
In 1949, Saft set up its first foreign subsidiary – Safta – in Belgium, followed by Saft UK in 1966. In the meantime, in 1954, the company tried to gain a foothold in the United States, supplying batteries to the US Air Force. These efforts were of no avail, because Saft's American partner lacked the necessary qualifications. The subsidiary closed down in 1957.
Saft's second attempt led to the creation of Saft America in 1974, born of the takeover of Gulton Industries. Production was then transferred from Gulton’s New Jersey location to Valdosta, in Georgia.
However, the real drive to internationalize the company came with Georges-Christian Chazot, who joined Saft in 1976 and was appointed general manager in 1981. His first concern was to optimize the launch of the Valdosta factory.
Then, in the early 1980s, Chazot and the management team conducted a strategic analysis with the Stanford Planning Institute to support Saft's international expansion. Attention was focused on three areas: North America, east Asia and western Europe. A period of intense development ensued. Saft, a subsidiary of CGE (Compagnie Générale d’Électricité) at the time, was supported by its parent company, which wanted a leading international player in this sector.
But the strategic plan naturally also involved various takeovers and the need to serve customers. To win certain defense contracts, for example, it was necessary to be a full-fledged national company, hence the requirement to set up subsidiaries. Saft's international history is a blend of those ingredients.
In 1982, export manager Philippe Boulais suggested taking advantage of opportunities in Singapore, which was seeking to build an industrial base, in order to establish the company there. Boulais thus opened a subsidiary in the city-state.
"At the time, Singapore paid low wages and granted 'pioneering' investors a five-year tax exemption," recalls Boulais. "Moreover, producing in Singapore allowed the company to serve certain countries in the region without customs duties. Take Australia, for example, which used to impose 30 percent tariffs on imports from more distant countries."
At one point, the Singapore subsidiary had as many as 100 employees, who assembled the components supplied by Saft. Subsequently, as Singapore developed, wages shot up and the subsidiary closed down.
Development in Asia
In 1986, Saft targeted Japan. Saft already had long-standing trade relationships with Fuji for disposable batteries, and with Japan Storage Battery for rechargeable batteries. But to break into the Japanese market, Saft needed a Japanese partner. With Japan Storage Battery, it set up the joint venture GS-Saft to develop, produce and sell sealed nickel storage batteries.
This was the era of Sony’s famous Walkman. To power this device, GS-Saft developed the GP, a little technological gem involving so-called "chewing-gum cells" due to their distinctive shape. The Walkman was soon followed by the first mobile phones, giving rise to a spectacular leap in demand for GP rechargeable batteries.
Over and above GS-Saft, GP rechargeable batteries were assembled in Tijuana (Mexico) to supply Motorola and Nokia, and in Seoul (South Korea) for Samsung. In 1997, through a capital increase, Mitsubishi Electric acquired a significant stake in GS-Saft. Saft, which had become a minority shareholder, subsequently sold its stake to Sanyo in 2002. The Japanese adventure resumed in 2016, however, with the set-up of Saft Japan.
In 1988, Saft established operations in Australia, then in China. A subsidiary based in Hong Kong – Saft China – managed a factory in Shekou, in the economic area of Shenzhen. This was a strategic choice for Saft, which was following its customers, namely the major manufacturers of electronic equipment. In their search for cheap labor, these manufacturers eventually left Japan (and also Korea, Singapore, Taiwan and Hong Kong) to move to China, which had just set up its first "special economic areas". In this way Saft supported the development of the Asian market for portable rechargeable batteries, which then accounted for 40 percent of the global market, with a growth rate of 20 percent a year – exceeding that of Europe and the United States.
Saft is currently settled in Zhuhai, China, where it set up operations in 2006 to support the country’s growth. The company doubled the factory’s capacity in 2016. Also in 2006, Saft took control of Amco Power Systems Ltd in Bangalore, India.
Despite intense activity in Asia, Saft did not turn its back on Europe and North America. In the 1970s and 1980s, Saft expanded its European network; after Germany in 1969 and Spain in 1972 (by founding the joint venture Saft Iberica with Cegasa), a subsidiary was founded in Italy in 1984, then in Scandinavia in 1985 and Finland in 1989. In August 1984, for the first time in Saft’s history, more than half of its employees were dedicated to the export business.
In February 1991, the acquisition of Swedish company NIFE, with its network of 22 foreign subsidiaries (compared with Saft’s 15), created a dense international network. Following the merger, the foreign subsidiaries were reorganized into four areas: Europe, North America, South America, and Asia-Pacific.
The European subsidiaries of Saft and NIFE were merged in Sweden, the UK, Belgium and Italy. In 1995, Saft’s acquisition of Ferak in the Czech Republic marked a new phase in the company's development, with its entry into Central Europe.
In 2001, Saft acquired Israeli company Tadiran, specializing in lithium-thionyl chloride (Li-SOCl2) batteries, operating in Germany, the United States and Israel. In 2003, a new wave of acquisitions took place, with Emisa in Spain, Friwo in Germany, and Centra in Poland, rounding off Saft’s East European presence.
In the United States, Saft America acquired Score (thermal batteries) in 1978, Gould (portable rechargeable batteries) in 1983, and then Duracell’s Li-SOCl2 battery factory. There were even more acquisitions to come: in 1993, Saft America took over Gates Aerospace Batteries. In 2001, it acquired Hawker Eternacell, thereby strengthening its presence in Li-SOCl2 technology. Little by little, the network was further extended. In October 2013, Saft opened a sales office in Moscow.
Saft now operates in 18 countries through 14 production sites and 30 sales offices. It is a truly global, customer-oriented company.